ISLAMABAD: The core business of the PIA would be offered to potential buyers with current liabilities and assets with the vetting of the federal cabinet, Caretaker Minister Fawad Hassan Fawad told mediapersons in a briefing on Tuesday.
In a media briefing along with Information and Broadcasting Minister Murtaza Solangi, Fawad said based on a study conducted in 2017 on the privatisation of PIA, the financial advisor would give a proposal to restructure PIA leading to its privatisation with or without government sovereign guarantee.
The final proposal pertaining to the PIA will be submitted to the cabinet for a decision, however, only core business will be offered to private operators. He said the financial advisor would also give the proposal for employees working in PIA.
‘PIA flight operation to Canada is continuing on regular basis’
He said the management of PIA and the secretary Aviation Division apprised the commission recently that per day losses of PIA are Rs500 million which is Rs12.77 billion per month or yearly Rs156 billion which is not sustainable.
Giving reasons in favour of the privatisation of PIA, he said at present, out of 34 air planes that constitute the fleet of the PIA, 15 were grounded. Out of the 15 grounded airplanes, six were taken on lease and $2 million per month were required for their payment.
Earlier, the federal government arranged Rs13 billion bailout package for the revival of PIA, however, the minister said that in long-term neither the federal government nor commercial banks are not in a position to further finance the losses.
The accumulated losses of PIA are Rs712 billion including Rs150 billion government loans and Rs22 billion debt taken by the PIA.
Talking about his recent briefing to the SIFC forum, he said that the Privatisation Commission does not come under SIFC purview, however, considering how critical the forum was for the economic, the commission gave a detailed briefing on privatisation to the forum headed by interim prime minister.
Caretaker Minister Fawad Hassan Fawad said the PIA flights to EU countries may be restored following the EU safety body visit to Pakistan for the safety audit.
The team is scheduled to visit in December-January.
It would help the PIA to cover operational losses of Rs450 million due to the ban on flight operations to EU countries, he added.
He further said that the privatisation commission extended the date for submission of the request for proposal (RFP) from a potential firm for the position of financial advisor for lease of Roosevelt Hotel, New York City, USA from October 8, 2023, to November 6. It has been observed that 30 percent of business places are vacated where the hotel is located due to work-from-home concept introduced after Covid-19, he added.
Talking about the privatisation of DISCOs, he said the commission proposed that the management of DISCOs would be offered with minimum shareholding at first place, and at the later stage, long-term agreement with major shares and management would be offered. However, the federal government would take the final decision. The privatisation of DISCOs may lead to private-sector monopolies in the absence of a competitive electricity market in Pakistan, the minister said the government would make sure that monopolies would not be created in any sector. He further said that there is no proposal to handover Pakistan Steel Mills (PSM) to China under government-to-government agreement. He said Rs1 billion were required for payment of gas bill of employees of PSM. The losses of PSM are Rs230 billion and Rs53 to 78 billion is payable to the SSGCL.
Copyright Business Recorder, 2023